The Defense Department reported four programs in its 2013 Selected Acquisition Report (SAR) summary with critical or significant Nunn-McCurdy unit cost breaches to their current or original Acquisition Program Baseline (APB).
Joint Precision Approach and Landing System (JPALS) Increment 1A and Vertical Takeoff and Landing Tactical Unmanned Aerial Vehicle (VTUAV) had critical breaches, which are unit cost increases of 25 percent or more to the current APB or 50 percent or more to the original APB. The Program Acquisition Unit Cost (PAUC) for JPALS Increment 1A increased 104 percent and the Average Procurement Unit Cost (APUC) rose 129 percent above the current APB, due to the elimination of 10 previously required shore-based systems, DoD said.
Also contributing to JPALS Increment 1A unit cost increases were an extension of the development program to include capability improvements, a lower and longer procurement profile and higher material costs. JPALS is a precision approach landing system for ship systems that works with Global Positioning System (GPS) satellite navigation to provide accurate, reliable and high-integrity guidance for fixed- and rotary-wing aircraft. Raytheon [RTN] is prime contractor for JPALS.
PAUC is the sum of total development costs, procurement costs and construction costs divided by total program quantity, according to DoD spokeswoman Maureen Schumann. APUC is total procurement dollars divided by procurement quantity. Nunn-McCurdy cost breaches require certification from service brass that such an acquisition program is essential to national security, there are no alternatives that will provide equal or greater military capability at less cost, the new estimates of the program acquisition unit cost or procurement unit cost are reasonable and management structure for the program is adequate to manage unit costs.
The PAUC for VTUAV, also known as the MQ-8 Fire Scout, increased 54 percent while the APUC increased 49 percent above the current APB. The PAUC increased 55 percent and APUC increased 72 percent above the original APB, due to an increased requirement for warfighter capabilities of the system and an overall reduction in the total air vehicle quantities being procured by the Navy. DoD said the increased capabilities of the system allowed total procurement quantities to decrease from 168 to 119 air vehicles. The VTUAV is developed by Northrop Grumman [NOC].
The Airborne Warning and Control System (AWACS) Block 40/45 Upgrade and Joint Tactical Radio System Handheld, Manpack and Small Form Fit Radios (JTRS HMS) reported significant breaches, or unit cost increases of 15 percent, but less than 25 percent, to the current APB; or 30 percent or more, but less than 50 percent, to the original APB. For the AWACS upgrade, the PAUC increased 23 percent and the APUC increased 19 percent above the current APB, also due primarily to a reduction in quantity from 31 to 24 aircraft. DoD said there were also unit cost increases associated with a stretch-out of the procurement buy profile caused by congressional reductions, which resulted in the loss of synergies and required an additional year of interim contractor support.
The Air Force recently completed its AWACS Block 40/45 Upgrade, which it said provided a complete replacement of the mission computer systems and a new, open and network-based architecture, which enables future net-centric operations (Defense Daily, April 11). Boeing [BA] is prime contractor for AWACS, which is an airborne early warning system supplying tactical air and defense forces with surveillance and C2 communications.
For JTRS HMS, the PAUC increased 20 percent and the APUC climbed 19 percent above the current APB, due to a revision in the acquisition strategy for full-rate production (FRP), including a change from a single vendor per radio to multiple vendors per radio. It was also due to vehicle integration requirements not previously identified as a funding responsibility of the program, DoD said, and a change in Army fielding strategy that fields fewer radios per year. General Dynamics [GD] C4 Systems is the prime contractor for JTRS HMS, which provides handheld and two-channel Manpack radios supporting Army, Marine Corps, Navy and Air Force operations.